Question 1

How much down payment do construction loans require in Burlingame?

Accepted Answer

Expect 20-25% down for most construction loans. Lenders view ground-up builds as higher risk than purchasing existing homes, so larger equity requirements apply.

Question 2

Can I act as my own general contractor to save money?

Accepted Answer

Some lenders allow owner-builders with construction experience and proper licensing. Most require licensed general contractors with track records in your area.

Question 3

What happens if construction costs exceed my loan amount?

Accepted Answer

You cover overruns from personal funds or contingency reserves. Lenders rarely increase construction loans mid-project, so accurate initial budgeting matters.

Question 4

How do construction loan interest rates compare to regular mortgages?

Accepted Answer

Construction loan rates run 0.5-1% higher during the build phase. Once the loan converts to permanent financing, rates match standard mortgage pricing.

Question 5

Do I need to own the land before applying for construction financing?

Accepted Answer

Most lenders require you to own the lot or close simultaneously. Some offer land acquisition rolled into construction loans for qualified borrowers.

Construction Loans in Burlingame: Finance Your Custom Build or Major Remodel